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The Franchise Memorandum

The Franchise Memorandum

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The United States District Court for the Northern District of Illinois granted franchisor KFC Corporation’s motion to dismiss, rejecting a franchisee’s claim that KFC had breached the parties’ franchise agreement by prohibiting him from telling customers that his KFC stores sold Halal chicken. Lokhandwala v. KFC Corp., 2018 WL 509959 (N.D. Ill. Jan. 23, 2018). Lokhandwala alleged that in 2002 KFC expressly permitted him to sell Halal chicken at his KFC stores. Relying on KFC’s alleged approval, the franchisee chose the locations for his five franchised businesses in ...

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A federal court in Wisconsin granted a franchisor’s motion for a preliminary injunction prohibiting a former franchisee from broadcasting a misleading radio advertisement about the franchisor’s business. Paul Davis Restoration, Inc. v. Everett, 2014 U.S. Dist. LEXIS 172227 (E.D. Wis. Dec. 12, 2014). Following a series of lawsuits, the franchisor, Paul Davis, sought to enforce an arbitration award against former franchisee Everett. Everett responded by running an ad, which purported to be a “business advisory,” construing the franchisor’s attempt to enforce the ...

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In an 8-0 decision announced on June 12, 2014, the Supreme Court held that a company may sue a competitor for unfair competition under the Lanham Act because of false or misleading food and beverage labeling and advertising, even when the labeling and advertising otherwise meet the requirements of the Federal Food Drug and Cosmetic Act ("FDCA"). POM Wonderful LLC v. Coca-Cola Co., 189 L. Ed. 2d 141 (U.S. June 12, 2014). POM, a pomegranate juice producer that markets and sells a pomegranate-blueberry juice, sued Coca-Cola under the Lanham Act for misleading labeling of the ...

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A federal court in Indiana declined to dismiss a breach of contract claim concerning the collection of advertising and marketing funds by the franchisor of a members-only buying club franchise. In Arcangelo, Inc. v. DirectBuy, Inc., 2013 U.S. Dist. LEXIS 164941 (N.D. Ind. Nov. 20, 2013), the district court concluded that the language of the franchise agreement was not sufficiently unambiguous to resolve the fee dispute as a matter of law. Arcangelo had filed suit claiming that DirectBuy charged excessive fees for advertising and marketing under the franchise agreement, which ...

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In Doctor’s Associates, Inc. v. QIP Holder LLC, et al., 2010 U.S. Dist. LEXIS 14687 (D. Conn. Feb. 19, 2010), the franchisor of the Subway system sued Quiznos for deceptive advertising under the Lanham Act and the Connecticut Unfair Trade Practices Act and for commercial disparagement under Connecticut law. At issue were a number of ads that depicted a Quiznos sandwich next to a purportedly comparable Subway sandwich, which ads claimed that the sandwiches were not really comparable because the Quiznos sandwich had twice the amount of meat contained in the Subway sandwich. DAI ...

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About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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